Most Charitable Russian Abramovich Leads Billionaires

Russia’s eighth-richest man Roman Abramovich is one of the so-called oligarchs who amassed vast wealth acquiring some of Russia’s biggest enterprises at knockdown prices during Boris Yeltsin’s presidency after the collapse of communism. Photographer: Simon Dawson/Bloomberg

The 46-year-old owner of London’s Chelsea Football Club
donated about $310 million of his $12.7 billion fortune to
philanthropic causes from 2010 through 2012, more than any of
Russia’s 15 richest citizens, according to data compiled by
Bloomberg. About a third of Abramovich’s gifts went to social
works projects in the Chukotka region near Alaska, where he was
once governor.

Alisher Usmanov, Russia’s wealthiest man, gave $247 million
to charity in the period, a Bloomberg survey of the country’s
richest people shows. He controls a $19.4 billion fortune,
according to the Bloomberg Billionaires Index.

“It’s just in the last few years that ultra-rich
individuals in Russia have started to pay attention to what they
can do to make this world a better place,” said Edward
Mermelstein, a New York attorney who helped billionaire Viktor
Vekselberg repatriate czarist-era bells from Harvard University
at a cost of $10 million. “In the past, charitable giving was
done more for vanity, but today we see some serious
philanthropists.”

Of the 15 billionaires surveyed, 10 provided data on their
philanthropic donations. Those who responded have a cumulative
net worth of $127 billion, and gave a total of $1.3 billion from
2010 through 2012, about 1 percent of their combined fortunes.

‘Unfair’ Wealth

That compares with the $6 billion spent in 2010 and 2011 by
the Bill & Melinda Gates Foundation, which is funded by Gates,
his wife and Warren Buffett. Gates and Buffett, the two richest
people in the U.S., have a combined net worth of $124.8 billion,
according to the Bloomberg ranking.

Abramovich amassed vast wealth acquiring some of Russia’s
biggest enterprises at bargain-basement prices during Boris
Yeltsin’s presidency after the collapse of communism. Since
1999, he has given or invested more than $2.5 billion to build
schools, hospitals and infrastructure in Chukotka, averaging
about $179 million a year, according to the survey.

President Vladimir Putin said during his campaign for a
third term last year that he was considering a one-time tax on
entrepreneurs who acquired state assets at “unfair” prices in
the 1990s. The bulk of Abramovich’s wealth is derived from the
sale of OAO Sibneft, the oil company he bought a controlling
interest in for $100 million in 1996 and sold to state-run gas
company OAO Gazprom for $13 billion a decade later.

Since buying Chelsea in 2003 for 142 million pounds ($217
million), Abramovich has spent more than $1 billion helping the
club win three Premier League titles. Last year, it became the
first London team to clinch Europe’s Champions League.

French Riviera

Abramovich has residences in London, in Cap D’Antibes on
the French Riviera, on the Caribbean island of Saint-Barthelemy
and in Aspen, Colorado. His 533-foot (162-meter) yacht, Eclipse,
the second-longest in the world, was moored in New York for
almost two months prior to the birth there of his seventh child
on April 8, his second with partner Dasha Zhukova.

Eclipse, one of the three boats owned by Abramovich, was
until recently the world’s largest privately owned yacht, and is
equipped with two helipads, a mini-submarine and two swimming
pools. The billionaire also owns a Boeing Co. 767.

World Cup

Putin, in 2010, said Abramovich should “dip into his
pocket” to help finance stadium construction for soccer’s 2018
World Cup, now projected to cost $20 billion. Russian
billionaires are often called upon to help finance projects the
Kremlin deems of national importance, such as preparations for
the Winter Olympics and the World Cup.

Under Putin, Russia’s billionaires have also taken
responsibility for maintaining a social safety net and spurring
economic development in single-industry towns where their
companies operate, a legacy of the Soviet system. Evraz Plc, the
steelmaker partly owned by Abramovich, spent $164 million on
social projects from 2010 through 2012, an amount that isn’t
reflected in Abramovich’s total giving.

Usmanov, 59, through his OAO Metalloinvest Holding Co., the
country’s largest iron-ore producer, spent $260 million in the
same period, subsidizing local services and social programs in
regions where the company works. That’s in addition to the $247
million of his personal wealth that he gave to charitable
causes, including gifts to universities and museums.

Vekselberg, who in March sold a 12.5 percent stake in BP
Plc’s Russian oil venture for about $7 billion, gave away $160
million, making him the country’s third most-charitable
billionaire. Apart from repatriating cultural treasures such as
the Danilov Monastery bells and Faberge eggs, the 56-year-old,
along with Abramovich, helped fund a Jewish museum and tolerance
center in Moscow.

Burdensome Wealth

Vladimir Potanin, the largest shareholder and chief
executive officer of OAO GMK Norilsk Nickel, the world’s biggest
producer of the metal, was the fourth-largest giver among
Russian billionaires. The 52-year-old donated $110 million,
mainly to educational and cultural institutions.

Potanin in February became the first Russian to join Gates
and Buffett’s Giving Pledge initiative, committing to give away
at least half of his wealth to charitable organizations and
philanthropic causes. He said then that he made the decision in
part to protect his children from “the burden of the extreme
wealth.”

The government needs to alter its approach to big
businesses to spur philanthropy, said Maria Chertok, country
head of U.K-based Charities Aid Foundation, which helps non-governmental organizations find sponsors. Russia, in 2011, made
individual charitable contributions tax-deductible and plans a
similar measure for companies.

“It’s about politics and attitude to wealth,” Chertok
said in an interview in Moscow. “Businesses have to pay for
certain projects. This is all quite different from the U.S.
environment and it casts a shadow on the charitable sector.”